Bredesen tells federal jury he didn't know Ford was OmniCare lobbyist

NASHVILLE -- Gov. Phil Bredesen testified Thursday that had he known state Sen. John Ford was being paid to lobby him on behalf of a health care company, he would have halted the conversation and called the Tennessee Bureau of Investigation.

Bredesen told jurors that Ford, then a powerful state senator, approached him in 2002 or 2003 and asked if the state could transfer more TennCare enrollees to the Memphis-based managed-care organization, OmniCare Health Plan.

Such a move would have translated into more money for OmniCare, whose parent firm had secretly hired Ford as a $17,000-a-month consultant.

"I would have terminated the conversation,'' Bredesen said in answer to a prosecutor's questions, "and informed probably the TBI that something inappropriate was happening.''

Ford, 66, is on trial in U.S. District Court on two counts of wire fraud and four counts of concealing material facts in connection with $800,000 he received from OmniCare and another state contractor, Doral Dental. OmniCare and Doral provided services to TennCare, the state's expanded Medicaid program.

Ford already is serving five years in federal prison for a separate bribery conviction. He was found guilty last year in Memphis of taking $55,000 in cash bribes from undercover FBI agents posing as crooked businessmen in a sting known as Operation Tennessee Waltz.

Prosecutors in the Nashville case told the court Thursday they will take testimony next week from two FBI agents involved in the Waltz sting.

Assistant U.S. Atty. David Rivera identified one of the agents as an undercover agent who testified in Ford's Memphis trial. That man is believed to be the undercover agent who answered to the code name L.C. McNeil.

The agent gained Ford's trust and sold the lawmaker on the idea of introducing legislation for cash on behalf of the FBI's bogus firm, E-Cycle Management Inc.

Rivera told U.S. Dist. Judge Todd Campbell that the agent is needed to introduce two undercover tapes that captured conversations relevant to the Nashville charges.

Another unnamed agent also will testify, Rivera said, to introduce "certain Title III'' tapes -- legal-speak for tapes secretly recorded from wiretaps.

Prosecutors in the Waltz case obtained a court-ordered wiretap on Ford's cell phone in early 2005. Prosecutors have indicated that one of those conversations involves Ford telling his close friend and then-OmniCare CEO Osbie Howard to keep quiet about payments he was receiving from the two TennCare contractors.

That Feb. 17, 2005, conversation came days after an investigation by The Commercial Apeal first uncovered Ford's secret consulting payments.

In addition to notifying the court of the tapes, prosecutors introduced state attorney general opinions from 1985 and 1996 that put Ford on notice about the need to avoid mixing private and public interests.

The 1996 opinion requested by Ford and signed by state Solicitor General Michael E. Moore specifically told the senator that it would be illegal for a state official to act as a paid consultant on behalf of a health maintenance organization contracting with TennCare.

Nonetheless, Ford signed a consulting deal in 2001 with United American Healthcare, OmniCare's Michigan-based parent firm. Ford's lawyer has argued that his client's consulting deals with OmniCare and Doral were legal because they involved services Ford performed outside Tennessee.

However, former TennCare director John Tighe testified Wednesday that Ford approached him repeatedly on behalf of OmniCare, asking for more enrollees and other considerations to produce more revenue for the MCO. In 2002, Ford even introduced legislation on behalf of OmniCare, according to evidence introduced by prosecutors.

Bredesen echoed Tighe on Thursday, describing how Ford once lobbied him on behalf of OmniCare in the doorway of his conference room.

"He argued that OmniCare could not function effectively with the number of members it had,'' Bredesen testified. Bredesen, who ran managed care organizations before becoming governor, said the conversation stuck in his mind because of its unusual nature.

Bredesen said he ran successful MCOs with 30,000 to 40,000 enrollees, and yet Ford wanted to add 20,000 to the 120,000 members OmniCare already had.

On cross examination, defense attorney Isaiah "Skip" Gant asked if it wasn't unusual for a senator to speak up on behalf an MCO in his district.

"Frankly,'' the governor answered, "a powerful state senator asking for a contractual matter like that would be a little unusual.''

Bredesen conceded, however, that Ford often spoke up on behalf of minority-owned businesses such as OmniCare.

Asked one last time by prosecutor Rivera of Ford's action, Bredesen said: "I would consider an elected official having a financial arrangement and then speaking as a state senator on behalf of that interest as outside of the realm of what was reasonable."